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PROPERTY

Sirius gets active in Germany with a disposal and two buys

Sirius sells a mature asset in Kiel for €7m, representing a net initial yield of 7.4%, including acquisition costs

05 September 2017 - 05:58
Alistair Anderson

Picture: ISTOCK

Sirius Real Estate, owner of flexible offices in Germany and a fledgling storage business, which recently joined the JSE main board, has sold a €7m mature asset and made two acquisitions for €25.8m.

Sirius’s main tenants are small and medium enterprises. The company is dual-listed on the main board of the London Stock Exchange and the JSE.

Sirius acquired a property in Neuss, just outside Düsseldorf, for €16.1m. This asset includes two office buildings that are 38.3% let with a net lettable area of 18,258m². It also acquired a property in Neu-Isenburg, outside Frankfurt, for total acquisition costs of €9.7m. This asset comprises a single office building that is currently 41.3% let, with a net lettable area of 7,996m².

"This also provides excellent scope as a property with great opportunity for significant asset management potential," said CEO Andrew Coombs.

Sirius sold a property in Kiel for €7m, representing a net initial yield of 7.4%, including acquisition costs. The property is now considered mature, having been turned around from an unprofitable position to generating €0.56m of net operating income. It consists of a single office building plus a warehouse with occupancy having grown under Sirius, from 19% to 92% on a net lettable area of about 10,000m².

Funding for the acquisitions will come from the proceeds of the firm’s disposals programme as well as an equity raise completed on July 28 2017.

Sirius acts as a rand hedge for South African investors. It has a euro-reporting currency with a listing price in pounds. The company has delivered a euro return of 97.9% over the past three years, or a 25% annualised return.

"These transactions are good examples of our strategy to recycle capital from mature assets like Kiel into opportunistic assets such as Neuss and Neu-Isenburg," Coombs said., which are secondary locations of Dusseldorf and Frankfurt, two markets we know well and where we are currently experiencing extremely high demand for office space," said Coombs.